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Last Updated: Tuesday, 12 September 2006, 08:11 GMT 09:11 UK
Euro debut for iTunes challenger
Creative MP3 players
eMusic will let owners of any music player listen to tracks
The world's biggest online retailer of independent music has opened a European store offering unrestricted downloads.

eMusic is the second most successful download site in the US after Apple's iTunes Music Store, and will sell tracks from 8,500 independent labels.

The subscription-based site will offer MP3 recordings that work on all digital music players, including Apple's iPod.

But eMusic has not struck deals with major record labels, who say their music must carry digital restrictions.

eMusic plans to sell music across Europe, and has employed music journalists to help confused customers navigate their way through its varied collection.

Rights or restrictions?

Users will be able to choose between three subscription levels, offering 40, 65 or 90 downloads each month.

If the maximum number of downloads per month is used, the cost of each track will be under 25p. Apple's iTunes service sells songs for 79p each.

This is recognition from the recording industry that there are other ways to distribute music
Mark Mulligan
Jupiter Research

Unlike other subscription-based download sites, such as Napster, tracks downloaded from eMusic will not be deleted if a customer cancels their subscription.

Analyst Mark Mulligan, vice-president of Jupiter Research, said: "What eMusic brings to the table is something different."

Mr Mulligan pointed to the difference in price between eMusic and iTunes, as well as a less restrictive approach to digital rights, as potential advantages of the new service.

Apple sells music encoded in the AAC format. It also adds its own Digital Rights Management (DRM) technology known as Fairplay.

Tracks using the Fairplay system are incompatible with music players other than the Apple iPod.

Apple and many other legal download services that use their own DRM technology also limit the numbers of computers a track can be played on, or the number of times it can be burnt onto a CD.

eMusic does not use any DRM.

"We are not against DRM," said Steve McCauley, European president of eMusic. "But we are against technology that prevents customers doing what they want with their music."

Despite using what some say is a restrictive DRM, iTunes is by far the largest player in the digital music segment, with an 80% market share.

Changing times

Another embryonic download service, Spiral Frog, has recently announced deals with major record labels to distribute music for free, replacing sales revenues with money from advertisers.

CD next to a keyboard
Most online stores restrict the number of copies users can make
Mr Mulligan said eMusic and Spiral Frog were part of a growing trend in the music industry away from the fixed price model pioneered by Apple.

"We are at the start of a realisation that the paid-for model is not paying off, but advertising revenues are still growing strongly.

"This is recognition from the recording industry that there are other ways to distribute music."

Alison Wenham, chair of the Association of Independent Music (AIM) suggested eMusic would allow users to discover independent music under-promoted or unavailable on services tied into deals with major labels.

"emusic is actually focused on growing the music industry instead of simply replacing physical sales with digital ones."

Despite the apparent low-cost of the tracks on eMusic, Mark Mulligan suggested the company would aim to make profits from customers who pay subscriptions but do not use up their monthly limits.

"It's like the restaurant that offers an all-you-can-eat buffet," Mr Mulligan said.

"They base their business on the idea that only a few people are going to eat so much they are actually sick."

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